Guest column: Federal actions help raise higher-ed costs

Media sources are awash in stories that focus upon rising costs of higher education and the link to rising student debt through federal student loan programs.

The reality is there is a collection of federal activities helping to drive up these same costs. The cost of higher education has become a top issue in federal government circles. Needed badly is a more robust and detailed discussion about why things cost more today than they did even a decade ago. One can only hope.

One can't separate the rising costs of getting degrees needed to be a competitive participant in the economies of tomorrow and the attendant rise in student loans accessed through federal programs. Students must get funds from somewhere. With diminished private loan markets due to the feds becoming the de facto company store for student loans, and with the decline in availability of home equity lines of credit, the federal loan programs become a prominent target.

It is relatively easy for policymakers in Washington to bemoan issues of affordability; finger pointing is a cheap and easy exercise, especially when solutions are difficult to fashion. So accountability becomes the catch phrase and university expenditures become a point of inquiry.

Let's take a look at these two entwined issues, just to begin to get a feel for the immense complexities and how often the accusers fail to address causative factors in rising costs — especially those in Washington, D.C., seeking to make points with a financially burdened electorate.

Recently, in The Chronicle of Higher Education, St. Leo University President Art Kirk focused on one major ingredient pushing up costs — rising regulations in almost every aspect of higher education and the attendant costs associated with compliance. Kirk wrote:

In short, there is no such thing as a free lunch and every new act, regulation and effort to comply requires a commensurate rise in costs to hire the personnel required, do the research, fill out the forms and respond incessantly to follow-up activities.

Note that these increased costs are not for classroom or research activities, each institution's primary reason for being. They are for added personnel, and ultimately this leads to a published article that bemoans the rising costs of university administration. Add to these costs those associated with program and institutional accreditation, compliance with increasing mandates regarding Title IX, etc. One small New York college performed an analysis of its federal reporting requirements, finding that in one year, 106 employees logged 7,200 hours completing federal compliance forms. Again, "there is no free lunch."

Florida-based institutions work hard to hold costs down, whether they be public or private. However, unless more attention gets paid to the tangled web of multitudinous regulatory bodies, each demanding new forms, data points and reporting activities, we are going to continue to see costs rise.

I would be remiss not to mention another catalyst of student loans costs — rising costs of borrowing since the federal government largely captured the market. We all know, especially those who have done any home-mortgage transactions, the fixed rate of your loan really drives the amount you end up paying back. This issue is far too complex for this writing, but to be sure, interest rates on student loans rose last year from 3.4 percent to 6.8 percent and the loan program has become quite the money maker for the federal government.

So the next time you read about rising higher-education costs and the burden on students and families, take a moment to think about the fuels that drive these costs.

About the writer

Ed Moore is president of the Independent Colleges and Universities of Florida, a Tallahassee-based association of 29 private, not-for-profit colleges and universities. As the father of four college graduates, Moore fully understands the costs associated with success. Column courtesy of Context Florida.